Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
992584 | World Development | 2006 | 18 Pages |
Abstract
SummaryCountries rich in fuel and mineral resources tend to have worse development outcomes than other countries. Commodity rents free governments from the discipline of tax revenues, so that natural resource wealth worsens the quality of governing institutions. I propose a system of Natural Wealth Accounts that converts rents into tax revenues, mimicking the discipline that tax revenues impose in resource-poor countries. This will create an endowment effect (citizens will require the government to justify why it is taxing their rents); an information effect (citizens will understand the problem better); and an income effect (the population will retain some of the rents).
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Martin E. Sandbu,